Current Setup and Live Chart
As indicated in the last article on this pair, the USD/TRY continues to trade within a managed-depreciation regime. The pair is trading near new record highs, but various interventions by the Central Bank of the Republic of Turkey (CBRT) have defended the Lira from sliding steeply.
USD/TRY Macro Drivers
1) CBRT intervention
The CBRT has used a combination of direct FX intervention (selling dollars for Lira), and liquidity controls to stablize the underlying depreciation trend. Reuters reports that the CBRT sold around $7.8–$8.0bn in FX in early March to achieve market and currency stability at the onset of the war risk premium.
2) CBRT Policy Stance
The next CBRT interest rate decision will be released on 22 April 2026 at 11:00 am UTC. The consensus is that the apex bank will leave the 1-week policy rate unchanged at 37.0% due to the war-driven inflationary risks.
A Reuters poll confirms the general consensus for a rate-cut pause and hold at 37% due to the fallout from the U.S.–Iran war. Some bond market indices are hinting at some pressure on the bank to hike rates, but this is an outside chance.
3) Liquidity tightening
Reports indicate that the overnight lending rates rose due to liquidity tightening. This is consistent with the managed Lira defense mechanism, utilizing funding conditions.
4) Oil Shock
The Lira remains sensitive to higher energy prices, as Turkey is a net energy importer. Higher oil prices are inflating Turkey’s import bill and heightening inflationary risks. This is consistent with a USD/TRY upside pressure unless oil prices cool materially.
USD/TRY forecast scenarios
- Base case: Expect a continuation of the slow grind higher, with sharp intraday mean reversion. The CBRT’s actions dampen the spikes, but the uptrend remains intact as long as inflationary fears persist.
- Bull case: a renewal of the geopolitical tensions and a corresponding spike in energy prices will stoke anxiety over Turkey’s external reserves. This will create more hedging demand and enable the bulls to push the market beyond the current upside boundaries. If the CBRT runs out of reserves to defend the managed depreciation, the spike in the USD/TRY could be sharp.
- Bear case: the Lira could experience a temporary relief rally if oil prices cool and the CBRT continues to ramp up its interventions. This will be more of a corrective move rather than a complete reversal to the downside, except for the drastic drop in inflation expectations.
USD/TRY Technical Outlook
The pair remains in an uptrend, with price action bouncing off the trendline on dips. The break of the 44.7672 resistance has ushered in a new record high at 44.8384. However, price has pulled back and looks set to retest the uncapped resistance that now acts as support.
A bounce off this support will enable a retest of the 44.8388 all-time high, with a view to pushing towards the 45.0000 price mark as the next target.
However, a decline below 44.7672 opens the door to a correctional decline, which could retest the trendline or the 44.6660 support. Below this support, the 44.6125 pivot becomes the new downside target.